Nokia and Xiaomi announced a multi-year patent agreement between the two companies, which includes cross-licensing cellular standard essential patents. According to CNBC, the companies reached an agreement on Wednesday to cross license patents from each other, which will help both in developing new products.

The partnership means that Nokia will provide network infrastructure equipment, which according to Gadgets 360, is usually required by large web providers and data center operators. Most likely, the Finnish firm would also help its Chinese partner with its operations in over 30 countries, in addition to providing technological advancements.

Apart from this, Nokia and Xiaomi will partner on optical transport solutions for data center interconnect, IP routing based on Nokia’s FP4 network processor as well as data center fabric solution. Moreover, both have agreed to explore opportunities in areas such as Internet of Things (IoT), augmented and virtual reality, and artificial intelligence.

Xiaomi, well known for making a mark in Asian markets for its innovative smartphone technology, is a leading Internet of Things player. According to NPU, Xiaomi’s MI Ecosystem IoT platform has crossed 60 million connected devices, with daily active connected devices of as much as eight million.

“Xiaomi is one of the world’s leading smartphone manufacturers and we are delighted to have reached an agreement with them. In addition to welcoming such a prominent global technology company to our family of patent licensees, we look forward to working together on a wide range of strategic project,” Nokia President and CEO Rajeev Suri said about the agreement.

Xiaomi’s Chairman and CEO Lei Jun also feels positive about the partnership saying, “Our collaboration with Nokia will enable us to tap on its leadership in building large, high-performance networks and formidable strength in software and services, as we seek to create even more remarkable products and services that deliver the best user experience to our Mi fans worldwide.”

Meanwhile, the partnership could also mean that the next Nokia smartphone could be powered by Xiaomi’s first in-house Surge S1 SoC processor. The processor is built on 28nm process with 64-bit cores and clocked at up to 2.2Ghz. It is paired with a quad-core Mali T860 graphics processor that brings 40 percent improved power efficiency as compared to its predecessor, the Mali T760. The processor also supports 32 high-performance voice DSP and VoLTE high-quality audio and video calls.

According to Gadgets 360, Xiaomi said that it only took 28 months for the processor to be thought of, produced and integrated into a smartphone on a large scale. The Surge S1 is currently integrated in the Xiaomi Mi 5c and is considered to be the main rival of the Snapdragon 625 and MediaTek Helio P20 and Kirin 655.

Aside from Xiaomi, Nokia has also entered into a new patent licensing agreement and business collaboration with Apple in the field of digital health. Just months ago, Nokia had sued Apple in Germany and the US for infringement on a number of its patents. The new business agreement will see Withings (Nokia) Digital Health products make a comeback on Apple’s retail and online stores.